Junction temperature is the highest temperature of the actual semiconductor in an electronic device. In operation it is higher than case temperature, the temperature of the part's exterior. The difference is equal to the amount of heat transferred from the junction to case times the junction-to-case thermal resistance.
Maximum junction temperature is specified in a part's datasheet and is used when calculating the necessary case-to-ambient thermal resistance for a given power dissipation. This in turn is used to select an appropriate heat sink if necessary.